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How to Ensure Your SBA Program Thrives Despite Uncertainty

By NewtekOne

June 2023

The recent leadership changes at the Small Business Administration (SBA) have stirred up concern among small business owners and lenders nationwide. With the changes to the SBA’s 7(a) Loan Program on the horizon, many worry that a lack of stable leadership could have harmful consequences for the entire lending community.

However, credit unions can take proactive steps now to maintain the growth of their SBA programs regardless of external factors.

Consider implementing these three strategies to succeed in the face of SBA uncertainty.

Invest in Staff Training and Education

One of the foundational pillars of a thriving SBA program is a well-informed workforce. Ongoing training and education allow credit unions to keep their team up to date with the latest developments in SBA regulations, lending guidelines and compliance requirements.

By empowering staff with the necessary skills and expertise, you can adapt to changes with confidence. Providing regular opportunities for professional development creates a culture of continuous learning, enabling staff to make informed decisions that support the success of the SBA program. Partnering with an established lender service provider (LSP) can be an excellent way to provide your team with specialized guidance on SBA processes and protocol.

Enhance Risk Management and Underwriting Processes

Uncertain times call for increased vigilance. Credit unions should reassess their underwriting processes and ensure that they’re robust enough to identify and mitigate potential risks.

Conducting thorough due diligence, including comprehensive financial analysis, collateral valuation and industry-specific risk assessments can strengthen the lender's ability to make informed decisions. Additionally, implementing early warning systems and establishing clear risk thresholds will enable you to promptly address any red flags that may arise.

If you need additional back-office resources to bulk up these underwriting processes, an LSP can again be a great solution to augment some or all of your SBA operations. With improved risk management and underwriting practices, credit unions can safeguard their SBA programs and navigate unpredictable times with resilience.

Foster Relationships With Borrowers and Partners

Building strong connections within the lending community is essential for the longevity of an SBA program. Credit unions should prioritize open and transparent communication with borrowers, providing regular updates on any changes that may affect their SBA loans. Proactive engagement can also help alleviate concerns and build trust, creating a solid foundation for long-term business relationships.

Nurturing relationships with SBA district offices, industry associations, and other program stakeholders is crucial, as well. Collaborating with these entities can provide credit unions with valuable insights, timely information and support during uncertain times. Not sure how to get started? The right LSP can facilitate these relationships for you!

Don’t Let Current Events Slow Your Growth

While uncertainty may be inherent in the SBA lending landscape, credit unions can take proactive steps to ensure the longevity of their programs. Whether you choose to manage your SBA program in-house or work with an LSP, these strategies empower you to adapt to changing circumstances, make informed decisions and provide excellent service to small businesses.

By implementing these measures, credit unions can position their SBA programs for long-term growth, regardless of the challenges that lie ahead.

Connect with NewtekOne to learn more. 

About NewtekOne

Businesses expect more and NewtekOne (NASDAQ: NEWT) delivers core solutions that help businesses grow. As a partner, NewtekOne provides SBA lending services, business financing, merchant processing, payroll, insurance and website/technology services that credit unions can offer to members.